KTC going after provincial credit card market

Upper-income segment in focus

Krungthai Card will start aggressively expanding its customer base to provincial markets and the mid-to-upper-income segment in the second half in an attempt to boost credit-card spending.

Of the 1.6 million KTC credit cards in circulation, 40 per cent are upcountry, but spending in the provinces represents only 15 per cent. Therefore, the provincial market has room to grow for the company, said Pittaya Vorapanyasakul, executive vice president for credit-card business.

She said credit-card use upcountry had been on the rise because many merchants now accepted them, driven by the expansion of retail outlets in main and second-tier provinces.

KTC will join forces with restaurant chains, as dining is among the top recipients of credit-card spending upcountry. She said KTC would offer exclusive campaigns in the second half to drive spending on dining in Bangkok and 13 main provinces.

The firm earlier planned to revamp the benefits offered by its credit cards and strongly promote them in the provinces in the first half, but it delayed the plan because of the gloomy sentiment from the recent political protests.

In the first five months, spending via KTC credit cards grew by only 5 per cent, far from the growth target of 15 per cent, to Bt138 billion. The firm also projected issuing 440,000 new cards this year, against 160,000 last year, but in the first five months, only 110,000 were issued, well behind the target.

However, spending in May grew by 7 per cent, an indicator of an upward trend for credit-card business. Therefore, the company believes it still has time to achieve the growth target of 15 per cent if it increases its customer base in the provincial markets.

KTC is a subsidiary of Krungthai Bank, which has 800 branches in the provinces. Therefore, KTB's branches will be the main channel for drawing new customers to KTC.

New card in August

Pittaya said the company would in August launch a new credit card to tap the high-end segment, those who earn monthly incomes of Bt80,000 and above, targeting 50,000 new cards.

Currently, mass customers with monthly incomes of Bt15,000-Bt40,000 account for 80 per cent, 15 per cent are in the mid-to-upper-income segment (Bt40,000-Bt80,000 a month), and 5 per cent are in the upper segment.

She said the company had acknowledged that it is not easy to offer credit cards to tap the upper segment because they already have cards. Still, this segment spends around Bt55,000 a month on average. Many other credit-card providers aim to tap this segment as well, and KTC in the third quarter will launch features for only this segment, such as international spending.

CIMB Thai Bank is another financial institution planning to enter the credit-card business, aiming to launch its first card in the fourth quarter to tap the high-end segment.